Northstar consulting contracts examined

07/25/2005

Mike Kaszuba,
Star Tribune
July 25, 2005

With Minnesota’s first commuter rail line awaiting critical federal funding, the state auditor’s office is reviewing documents that show that some consulting firms have had nearly identical contracts with the two government agencies overseeing the Northstar project.

While rail officials insist the payments were proper, an Anoka County commissioner critical of the commuter rail project says the practice amounts to “double dipping.”

The documents reviewed by the Star Tribune show that the Northstar Corridor Development Authority—the main government agency pushing for the commuter rail line—paid $349,194 three years ago to Himle Horner Inc., a public affairs consulting firm led by a former state legislator.

During the same year, the Anoka County Regional Railroad Authority paid $344,000 to the same company for the same reason: to promote the Northstar commuter rail project.

Together, the two agencies have paid the company $2.2 million over the past six years to help get the project approved.

The documents also include a consulting contract given to Paul McCarron, a former Anoka County commissioner who once chaired the county’s Regional Railroad Authority. McCarron was awarded a contract by the Northstar Corridor Development Authority three days after he left office in January 2003.

The contracts are among hundreds of pages of documents that have been requested by the auditor’s office, which announced in March that it was reviewing the project’s spending. Investigators have not revealed the scope of the inquiry or its timetable.

The inquiry comes at a sensitive time for the much-debated Northstar project, which would cost $265 million, carry passengers over a 40-mile rail corridor between Minneapolis and the northwest suburbs and only this year succeeded in winning the Legislature’s commitment to fund it. Because of the delays in obtaining state money, federal transportation officials are withholding a recommendation that the project receive federal money.

‘A cash cow’

“Taxpayers of Anoka County are paying double for these contracts,” said Rhonda Sivarajah, an Anoka County commissioner who also has questioned other consulting contracts for the project. “Northstar has basically become a cash cow for all of the lobbyists and public information groups.”

The documents requested by the state auditor highlight the link between Anoka County’s railroad authority, made up of the county’s seven elected commissioners, and the Northstar Corridor Development Authority, which consists of officials from cities and counties along the rail corridor, including Anoka County. Tim Yantos serves as executive director for both agencies. Anoka County provides at least 63 percent of the development authority’s budget.

“It’s a partnership,” said Yantos, explaining the relationship between the agencies. “The majority of that corridor runs through Anoka County. ... Both are working together to make sure that all of the tremendous amount of work that is necessary to get done is completed.”

Dennis Berg, another Anoka County commissioner, said that “there is clearly an overlap,” but that officials at the two agencies are careful about paying for redundancy. “I don’t see it as a sign of suspicion or corruption,” he said. The county’s rail authority, he said, is “just protecting the public” with its consulting contracts.

In defense

Officials for the two agencies blamed Northstar’s critics for instigating the state auditor’s review and defended giving separate Northstar contracts to the same consulting firms. Anoka County’s Regional Railroad Authority, unlike the Northstar development authority, was more focused on the project’s possible economic development spinoffs in the county, they said.

Anoka County’s rail authority, which met just five times in 2004, paid nearly $241,000 in consulting contracts that year, almost all for the Northstar project. In the past six years, according to records requested by the state auditor, the county’s rail authority has spent $1.47 million in consulting contracts, mainly related to the Northstar project.